LITTLE ROCK, Ark. (KTHV) -- Are you struggling to make your monthly mortgage payments?
If you're in a little over your head and need help making ends meet, we have some good news. You may have more options than you think when it comes to lowering your monthly mortgage payment.
Here are a few solutions from Yahoo! Homes.
1. Lengthen your mortgage term - One solution to lower your monthly payments is to extend your mortgage. For example, go from a 15-year mortgage to a 30-year fixed-rate mortgage. This way you're paying off the same principal over a longer period of time and your monthly payments are lower.
However, this comes with a price. Because the mortgage is longer, you'll be paying much more in interest over the life of the loan.
2. Refinance to a lower interest rate - If you lower your interest rate you probably lower your monthly payment, because the interest rate is a big part of your monthly payment calculation. So re-financing could really help out with your cash flow situation.
3. Say goodbye to your private mortgage insurance - If you made a down payment of less than 20-percent of the purchase price of your home, you're likely paying private mortgage insurance. You can get rid of PMI once you attain 20-percent equity in your home, based on the original purchase price. To cancel PMI, all you need to do is request it to be cancelled in writing.
4. Ask for a loan modification - An alternative to refinancing your mortgage could you ask your current lender for a loan modification. This is a change in your current mortgage terms, agreed to by your lender, to make it easier for you to make your monthly payments. It doesn't cost anything so you might as well try.
5. Get a cash-out refinance - This could give you an infusion of money just when you need it most. It's essentially the process of refinancing for an amount greater than what you owe on your home, and receiving the difference in a cash payment. This is an option that should be very carefully considered though, because when you do a cash-out refinance, you own less of your home.
Yahoo! Homes has great diagrams that break down mortgage payments for different price ranges. Check out more on their website.